HMA hires advisers amid merger speculation

Bloomberg News

Published: Thursday, June 13, 2013 at 9:38 a.m.

Last Modified: Thursday, June 13, 2013 at 9:38 a.m.

Health Management Associates Inc. (HMA), the Naples-based company negotiating a lease to take over Munroe Regional Medical Center, said it hired advisers to consider strategic alternatives after the largest shareholder said the hospital company should ease its poison pill defenses against a hostile takeover.

HMA said it hired Morgan Stanley and Weil, Gotshal & Manges LLP in connection with share purchases by Glenview Capital Management LLC and the “ongoing consideration of strategic alternatives and opportunities available.” The board also formed a committee to find a replacement for Chief Executive Officer Gary Newsome, HMA said Wednesday in a statement. (Read the full statement here: http://ir.hma.com/phoenix.zhtml?c=87651&p=irol-newsArticle&ID=1829387&highlight=)

Glenview Capital has urged HMA to cancel the poison pill or amend it to allow an investor to hold 25 percent of shares without triggering the takeover provision, an increase from the current 15 percent. Glenview Capital, based in New York, holds 37.8 million shares of the hospital operator, or 14.6 percent of shares outstanding, according to the filing.

HMA owns 71 rural hospitals, about a third of which are located in Florida, with about 11,100 beds. Newsome’s announcement on May 28 that he would step down and the moves by Glenview Capital have spurred speculation the company may be acquired.

HMA surged 11 percent, the most in almost four years, to $15.51 at the close Wednesday in New York before the advisers’ announcement. The company has advanced 40 percent since May 24, when it announced the takeover defense.

Glenview Capital said in a June 11 filing that it’s considering whether to devise plans and proposals that may change Health Management’s board. It also plans to talk with potential nominees and may reach out to management, directors, shareholders, potential investors, financial advisers and others.

HMA said in a May 24 filing that it adopted a takeover defense because Glenview Capital had sought regulatory approval to purchase as much as $2.2 billion of stock -- at the time, about a 75 percent stake. The investor responded by saying it had “no present intention or future plan” to purchase that much stock.

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